The whole of Hollywood has been in a frenzy ever since the news of Netflix acquiring Warner Bros. came out. The move sent shockwaves through the industry, with many people wondering about the ramifications of this corporate decision. Since then, Paramount has tried to outbid Netflix, but it seems that Warner Bros. has already decided on their partner from prom night. They have now rejected Paramount’s offer and even reached out to their shareholders, explaining the decision.
Warner Bros board writes to shareholders
As per THR, Paramount offered $108 billion compared to Netflix’s $82 billion. But Warner Bros. have sent a letter to their shareholders and have asked them to reject Paramount’s offer. According to the BBC, the Warner Bros. board voted unanimously to side with the streaming giants. The letter said that Paramount’s “inferior” offer carried “significant risks and costs,” in large part because it relies heavily on borrowed money – whereas the Netflix offer is backed by a company worth more than $400 billion.
In a legal filing, the board also argued that the tie-up with Paramount poses several threats for them in the future, and they also aren’t exactly fans of the fact that the Ellison family is backing the deal.
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The Donald Trump factor
For context, the Ellisons are one of the oldest and richest families in the country, and they also have close ties to President Donald Trump. David Ellison is currently the CEO of Paramount, and he is the same man who is reportedly being pressured by Trump to make Rush Hour 4. Oracle’s billionaire founder Larry Ellison and David’s father is a close friend of Trump.
If the Paramount offer goes through, it will bring CBS and CNN under the same roof, raising questions about editorial control. The shift has been evident in CBS News after Skydance purchased Paramount in August. Trump has publicly questioned the Netflix deal, claiming it “could be a problem” with an outsized control of the market with Netflix. Taking all these facts into consideration, the Warner Bros. board has recommended to its shareholders that siding with Netflix co-CEOs Ted Sarandos and Greg Peters is better for them.
The difference between ‘hostile’ Paramount offer and Netflix’s
The biggest difference in both the offers is that Netflix only wants to buy Warner Bros.’s movies, HBO, DC and their library. The TV channels, such as CNN or TNT, will be sold off to a different company before the takeover. However, Paramount is coming for all of WB’s assets, meaning they would now have control over their rival news channels such as CBS, MTV and Showtime.
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On the other hand, Ted Sarandos is doing everything to help convince Warner Bros’s shareholders to sign with his company. He and Peters even visited the WB studios in Burbank to meet with the leaders of the company they wish to acquire. During a separate event organised by Canal+ Group, Ted made a surprise appearance and attempted to put everyone’s mind at ease about the whole situation. He addressed the concerns people had with WBD movies going straight to streaming or having shorter theatrical windows after the takeover.
He said, “Our intentions when we buy Warner Bros. will be to continue to release Warner Bros. studio movies in theatres with the traditional windows. We never got into it before because we never owned a theatrical distribution mechanism.”
